has been the major player in the microprocessor space followed by AMD, IBM and TexasInstruments.

On
the operating system (OS) front, Microsoft has dominated with roughly 90% of new PCs (in 2001)
shipped worldwide with its Windows OS. Microsoft started with its Disk Operating System (DOS),
followed by its Windows 3.0, Windows 3.1, Windows 95, Windows98, Windows NT, Windows 2000 and
Windows XP. Some of the different alternatives topersonal computers that exist today are hand-held
PDAs, smart-phones, set-top boxes andeven the X-box offered by Microsoft.

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Major manufacturers in the PC industry are constantly competing to produce least expensiveyet most
efficient machines on the market. As technology changes rapidly, competition in thepersonal computer
industry is on the rise. With the advent of internet technologies, the timespent from order placement to
delivery has drastically reduced. PC demand is found to beaccelerating, and a big growth in the sale of
notebooks is an indicator that the market willcontinue to grow.PC prices have been falling continuously
and the major reason, along with intense competition,has been the significant reduction of
microprocessor prices by Intel which ranges to about 50%per year. Outsourcing to contract
manufacturers to produce both components and completePCs has been on the rise which has led to the
reduction of cost to the manufacturers apartfrom improving turnaround time. Also, companies are
moving from a build-to-stock to build-to-order or configure-to-order strategy so that they can
potentially reduce its cost by 10%.Developing economies like India and China are seen as potential
market for buyers andmanufacturers due to the fact that it is an attractive growing economy and
provides theadvantage of cheap labour. Hence, huge expansion plans are seen in the pipeline.

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Threat of New EntrantsWhile there is always a potential for new competitors to emerge, the
personalcomputer industry is dominated by five main competitors: Dell, HP, Compaq, IBM, andApple.
The presence of dominant players deters the entry of new players toimmediately enter this market and
establish their brand.A greater threat to the computer industry is the existence of a great number of
amongst industry leaders. In such a competitive environment, these companies oftenpool costs together
on the research and development field. This creates an increasedcompetition between companies who
are competing to build superior products basedon the same information, and the larger companies
often engage in buying out thesmaller companies, increasing their competitive edge.Established mobile
phone manufacturers can also be considered as a threat to the PCindustry because they can easily shift
to PC manufacturing given their technical expertiseand channel establishment apart from brand image